Blue Frog cuts staff, board member quits

Blue Frog Media has cut about 55 employees and shut down a Hispanic music channel called BullaTV that allowed users to send text messages to the TV screen.

About 75 percent of the cuts occurred at the company’s operations in Mexico and the Philippines, though staffing at the Seattle headquarters was cut by more than half. The company now employs about 10 people in Seattle and 235 worldwide.

“It is really difficult to be a competitive player in the U.S. Hispanic marketplace, with Univision and NBC’s ownership in Telemundo,” said Chief Executive Victor Siegel, adding that they plan to focus efforts on a music video channel called Noyz. “Running a 24/7 channel against those competitors is a difficult thing.”

In what could spell additional trouble, board member Maha Ibrahim of Canaan Partners stepped down a couple days ago. Canaan is one of Blue Frog’s largest investors, having participated in the company’s $16 million venture round in 2005.

No explanation was given for Ibrahim’s departure, with Blue Frog Chief Executive Victor Siegel at first saying that he had not communicated with the venture capital firm about the decision. When asked why, Siegel said “I just haven’t had a chance to talk to them.”

In a follow up interview, Siegel recanted his previous statement and said he had spoken to Ibrahim. He declined to elaborate on the conversation, saying it was “confidential.”

Blue Frog has encountered rough patches in the past, including the board’s removal of top executives Ian Eisenberg and Jeff Moore in January. (At the time of that announcement, Blue Frog employed just over 50 people in Seattle.)

Despite the leadership changes, recent layoffs and product changes, Siegel said that the company is on solid footing. It still offers ringtone and other mobile content services, though the big push right now is in the interactive TV services.

“I always hate to have to do any of this. But like I said, if you look at the prospects of the company going forward, we feel really good about it,” said Siegel. “The right thing to do is to get out of the Spanish business … but all of our other interactive television efforts continue to go forward.”

Even though Blue Frog made a heavy investment in BullaTV, Siegel said that they decided to put resources into other text-to-TV efforts like Noyz. Next year, it plans to introduce Noyz Country and UR Noyz, which will focus on Christian music.